BLM’s Actuarial Group previously reported on the latest ONS life expectancy data, published towards the end of 2019, and what we anticipated will be a consequent reduction in multipliers for futures losses in personal injury claims. Since we examined that data and its likely effect on multipliers the world has changed and the coronavirus pandemic has placed mortality rates front and centre of the global agenda.
Personal injury practitioners considering life expectancy in the context of serious injuries await the publication of the new edition of the Ogden Tables, the 8th, which will incorporate the ONS data which now shows that projected improvements in mortality in the 10 years since the 7th edition was published have actually been at a slower rate than allowed for in the 7th edition. Hence the expected reductions when the 8th edition is published.
The activity of the Ogden Working Party, and the publication of the 8th edition, has inevitably been delayed by the current restrictions placed on everybody’s working practices and the competing priorities resulting. However, it is understood that the new edition will be published shortly, perhaps before the summer break, at which point we will comment further on the methodology adopted and the effects.
There has been significant media interest in the ramifications of coronavirus on life expectancy. While the current excess death rate due to the virus is shocking and undeniable, less certain is the longer term effect on the surviving population (or what the size of that surviving recovered population will be). At the end of March, Professor Nick Hart - who would later treat the Prime Minister for Covid19 - described the disease as “this generation’s polio” and hinted at longer terms effects in this widely-shared tweet:
#COVID19 is this generation's polio.
Patients have mild, moderate and severe illness
Large numbers of patients will have physical, cognitive and psychological disability post critical illness that will require long term management
We must plan ahead
The extent of long term effects on, for example, the lungs and the heart are unknown. The effects would have to be significant and widespread to be a material factor in the wider population data on which the Tables are based. It seems reasonable to assume that a 9th edition of the Tables would logically follow after the next discount rate review due in 2024/25, which would allow for at least two further life expectancy data sets, in 2021 and 2023, to have been published by the ONS.
For now the focus will switch to what the tables in the 8th edition will show by way of reductions in multipliers and across what age ranges. It should also be borne in mind that for claimants demonstrating significant health consequences resulting from coronavirus, the potential effect on life expectancy will be a further area for investigation by practitioners to determine whether a reduction from the standard Ogden multipliers for life expectancy is likely to be relevant.